Mill City avoids summer fundraising woes; Metabasis exchanges warrants; Crowflight plans placement

By Kenneth Lim

Boston, April 16 - Mill City Gold Corp. said its C$1.5 million placement allows the company to head into the summer free from fundraising concerns.

Metabasis Therapeutics Inc. said it sought to reduce dilution as it raised almost $10 million through a private placement of stock and warrants and a concurrent warrant exchange.

Crowflight Minerals Inc. announced a C$11 million private stock placement that it expects to use for exploring future expansion.

Mill City gets head start

Mill City said it is selling C$1.5 million worth of stock, flow-through stock and warrants in a non-brokered private placement.

The company said it will sell 7.5 million units at C$0.20 apiece. Of those units, 3.75 million will consist of one flow-through common share and one half-share warrant and the remaining 3.75 million units will consist of one common share and one whole warrant.

Each whole warrant is exercisable at C$0.40 for two years. The warrants may expire sooner if the company's common shares close at C$0.60 or higher for 20 consecutive trading days. In that case, the warrants will expire on the 20th day after the company notifies holders.

Mill City common stock (TSX: MC) closed at C$0.17 on Wednesday, up by 13.33%, or C$0.02.

Mill City, a Calgary, Alta.-based gold exploration company, said proceeds will be used to fund the company's ongoing exploration program in the McFaulds Lake Area and for general corporate purposes.

Pinetree Capital Ltd., Northfield Capital Corp. and William O. Ballard, president of Orion Capital Inc., have agreed to purchase a substantial portion of the units.

"We didn't solicit these people," Mill City chairman, president and chief executive officer James R. Brown told Prospect News. "These people solicited us. They understand what this play is all about."

"I think it's a very significant deal," he added. "Obviously we're going through some very, very unusual markets these days, have been for the past several months. From Mill City's perspective ... the fact that in our news release that we issued [Tuesday] indicating that we have several high-priority drill targets was followed up with this financing package with several parties who are well-known in the mining industry speaks very well of the company."

Brown hopes that the market will be heartened by the actions of the investors, who are established investors in the mining industry.

"Pinetree is involved, Bill Ballard, Northfield, and they are buying at a price that's a third above the current market price, which speaks very, very highly of what the company has to offer," Brown added. "I've had a fair bit of exposure to the public marketplace, and people generally invested with other people, and when people take a look and they see Pinetree Capital and Northfield Capital etcetera, this should signal to people that this is a good company."

The additional capital should ease some fundraising burden from Mill City as the summer months approach, Brown added.

"The summer months tend to be slower for money raising than other times of the year, and we have a very fast-track schedule to get these targets drilled," Brown said. "I expect we'll get some very good results and we may have to do some follow up drilling and this will give us the capital to do that."

Brown does not expect to have to come back to the market soon.

"There's warrants attached to this financing, so if all the warrants are exercised you're looking at more money," he said.

Metabasis completes placement

Metabasis Therapeutics said it sold $5.81 million of stock and warrants in a private placement and raised a further $3.94 million by lowering the strike price of existing warrants.

In the placement, the company sold 2.5 million common shares at $2.34 per share. Investors also received five-year warrants exercisable at $2.69 for 1.1 million common shares.

As a result of the lower strike price, warrants for the purchase of 127,557 shares of common stock with an exercise price of $8.70 per share and warrants for the purchase of 1,558,279 shares of common stock with an exercise price of $6.74 per share were exercised at $2.34.

Metabasis common stock (Nasdaq: MBRX) dropped 0.87%, or $0.02, to close at $2.30 on Wednesday.

Based in San Diego, Metabasis is a biopharmaceutical company focused on the development of treatments for chronic diseases involving the pathway to the liver.

"The structure of this transaction allowed us to accomplish a number of objectives," Metabasis chief financial officer John W. Beck said in a statement. "First, we were able to raise a meaningful amount of operating capital; second, we were able to provide the participants in the transaction the opportunity to enhance their existing positions in the company at our current price; and third, we were able to reduce the dilutive effect of potential future warrant exercises by reducing the number of outstanding warrants.

"This transaction is entirely in keeping with our revised strategic plan which is focused on enhancing shareholder value by advancing our product candidates further into clinical trials while minimizing dilution to our existing stockholders."

Crowflight to raise C$11 million

Crowflight Minerals said it plans to sell C$11 million of stock in a private placement.

The deal involves 8.1 million common shares at C$0.62 apiece for C$5 million. It also will sell 8 million flow-through shares at C$0.75 apiece for C$6 million.

Crowflight common stock (TSX: CML) closed Wednesday at C$0.64, higher by 3.23%, or C$0.02.

The deal will be conducted by a syndicate of underwriters led by Macquarie Capital Markets Canada Ltd. and including Versant Partners Inc.

Crowflight, a Toronto-based resource exploration company, said proceeds will be used for working capital and general corporate purposes.

"While the $55 million debt facility we completed earlier this year will cover our remaining budget for the development of the Bucko Lake Nickel Project, the funds raised through this private placement will allow us the flexibility to advance the study of future expansion opportunities at Bucko and to continue to explore our extensive land position in the Thompson Nickel Belt," Crowflight president and CEO Mike Hoffman said in a press release.

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